Phoenix, AZ Multifamily Market Report Q2 2026
Phoenix Reached Its First Supply-Demand Balance Since 2021 as Vacancy Improves
By the Numbers
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Demand
Phoenix’s vacancy rate improved this quarter, down 21 bps YoY to 5.31%. Rent remains negative at -2.60% YoY, but that’s a real improvement from the -3.28% decline a year ago, continuing a gradual climb back toward flat that’s been underway since 2023’s -4.10% low point. Net absorption of 5,520 units was down from an unusually strong 7,341 a year ago, but occupied stock still grew to 440,552 units, up 4.6% YoY in a market that’s absorbed more new supply over the past two years than almost anywhere else in the country. After three years of oversupply, Phoenix looks like it’s finally catching up.
Supply
Phoenix’s construction pipeline has fallen by half its peak: units under construction are down to 27,240, just 5.86% of inventory versus a 13.41% peak in Q4 2023, after the metro delivered more than 60,000 units since 2022. TTM completions fell 21.2% to 20,047 units, still a large number in absolute terms, but down meaningfully from the 25,124 delivered at the top of the cycle in 2024. Phoenix looks to be approaching its first real supply-demand balance since 2021, a milestone that would have seemed unlikely as recently as a year ago.
Investment Market
Investment activity has been remarkably steady. The TTM volume was essentially flat year-over-year at $4.95B, even as Q2’s $1.25B came in down 25.4% from a year ago.
Cap rates have ticked up slightly to 5.17%, while price per unit eased to $243,948, down 13.7% from the 2022 peak of $282,639.
Volume
- $4.9B TTM volume
- Q2 2026: $1.25B
- Series peak $18.6B (2021)
Pricing
- Cap rate 5.17%
- Price per unit $244k
- Rent decline narrowing
